Temporary Staffing Pros And ConsNatalia Persin
Temporary staffing is a staffing concept that dates back decades. However, ever since it entered the business world, temporary staffing has revolutionized employment and given businesses a chance to overstep staffing problems.
Are you considering hiring temporary staff for your business? Below, we have provided everything you need to know about temporary staffing, including the pros and cons of the employment option.
What Is Temporary Staffing?
Temporary staffing or temporary employment is an employment option where an establishment employs workers for only a specific period. These workers are contractors only employed for a fixed term or a project/task-based contract. Essentially, temporary workers only work with a company as seasonal or casual employees.
As the term suggests, temporary employees are different from others because they only work temporarily. Depending on the form of the contract, a temporary employee may work as a fixed-term contract or casual work employee.
- Fixed-Term Contract
Also known as project-based or task-based contracts, fixed-term contracts are contractual employment arrangements between an employer and employee with a limited duration or a stipulated event that marks the end of the contract. These contracts are common in the business world and hob market.
Fixed-term contracts serve certain purposes and have a unique set of rules depending on the sector and company. However, what is common among all those fixed-term contracts is they give companies the flexibility to work with changes in the demand for employment.
There are numerous reasons why companies choose to work with temporary staff. Some reasons companies may choose to hire fixed-term contractors include seasonal fluctuations inability to replace temporarily absent employees to evaluate these contractors before hiring them as permanent employees. However, another reason businesses choose to work with temporary staff is that the option is a better alternative to hiring a permanent employee.
- Casual Work
Casual work usually involves hiring a worker for an extremely short period. This type of temporary staffing is usually occasional and for a specific duration. Based on the duration of the employment, duration is set to be paid daily or weekly.
Casual work is equally popular in the business industry, especially among low-wage jobs in low-income developing countries. However, as temporary staffing has improved and becomes more popular, so has the concept of casual work or “gigs,” as they are fondly called.
Now, casual work has become a part of industrialized economies in developed countries. It is highly on-demand, leading to many casual workers in the business industry.
The Beginning Of Temporary Staffing
Temporary staffing is a part of business history, dating more than a century ago. In fact, the staffing industry began in the 1940s.
Staffing agencies in those days, like today, were established to provide career opportunities pre- and post-WWII. Men vacated their positions to fight in the war, throwing employment off balance.
Soon, and very swiftly too, there were vacant job positions and insufficient qualified candidates to fill the seats. To save the plummeting economy, staffing agencies were established. Temporary staffing became an easy way for businesses to get jobs done and quickly hire employees.
Although the efforts of temporary staffing agencies in sustaining the U.S. economy were first noticed in the 1940s, many people reckon that staffing businesses may date back to the 1800s.
Regardless of when temporary staffing was created, it is inarguable that the first ever modern temporary staffing agent was founded in 1946 by William Russell Kelly. Kelly founded the famous “Kelly Girls,” a popular staffing agency that offered female candidates for clerical and secretarial work.
Ever since Kelly began the first-ever temporary staffing business for outsourcing skills for professional service, the staffing industry has grown to be a significant part of the US economy. In fact, as of 2023, there are 12,554 Employment & Recruiting Agencies businesses in the US. This is an increase of 2.3% in the number of recruiting agencies in the previous year.
According to the American Staffing Association, pre-pandemic, there were about 25,000 staffing and recruiting companies operating around 49,000 offices. According to this statistic, about 56% of companies and 75% of offices are in the temporary and contract staffing sector of the industry.
How Does Temporary Employment Work?
Temporary hiring or staffing is primarily done through a temporary staffing agency. Every temporary staffing agency has unique protocols, but matching employees to establishments follows a similar process each time.
The staffing agency will ask you questions regarding your business, the vacant job role, and the candidate you want to work with. After understanding your needs, the agency will try to fill the vacant role with an eligible candidate selected from its network of available candidates. The candidate will be chosen according to the merits you want to see in your employee.
Before choosing to work with a temporary staffing agency, there are two important things you need to know and be knowledgeable about. They include:
- The Agency Charges Employers:
As anyone will guess, staffing agencies are businesses. Hence, they need to make returns or profits. However, this profit does not come directly from the candidates in their pool.
Agencies charge employers to connect them to the right candidates. The few payments supply the candidate (who, in this case, is the product) to the company to fill the establishment’s needs. Any additional benefit the employee then receives comes from the agency.
- The Employee Works For The Agency, Not You
Although the employee might be working for your company, they are not exactly your employee in the full sense of the word. A temporary employee works for the agency but offers their skills for service to you.
The agency treats the candidate as their employee, although the candidate might not necessarily be turning up to the agency to work. The agency has a set time to pay the candidate, like any regular employer. The agency can also attend to issues or problems the candidate causes in an establishment.
Essentially, although the candidate answers to your company, they work for the agency they are tied to.
Pros And Cons Of Temporary Staffing
Temporary staffing or employing temporary staff has become commonplace for businesses. This is because they offer benefits that a regular hiring process does not.
However, in the same vein, temporary starting is not always the best option as it comes with several limitations that may be problematic if not handled properly. Below, we have highlighted some of the benefits of temporary staffing and some of the problems companies that want to use temporary staff may run into.
Pros Of Temporary Staffing
1. Near-Immediate Staff Availability
The average hiring process in a company takes three to six weeks. This duration is usually from the sourcing stage to the final interview. In the highly competitive business ecosystem, three to six weeks is a long time to wait for an employee to assume their position and begin to play their roles in a company.
Temporary staffing provides a way for companies to bypass or shorten this duration. Hiring a temporary employee eliminates the need to source talent, review hundreds of resumes, interview candidates, or review skills.
By choosing a temporary staff, you get a ready-made talent pool and have the staffing agency do the work for you. This saves valuable time, especially if you want an employee to start work immediately.
2. Reduce Hiring Costs
According to a study, the average cost of hiring an employee is around $4,000. However, this number may vary depending on the company and the hiring process the company chooses.
Although temporary staffing agencies also require a fee, this is nothing compared to the costs companies spend on hiring employees. By using a staffing agency, you minimize your spending as possible, as you do not have to focus on necessities such as advertising costs.
Essentially, hiring temporary workers may be a solution to recruiting effectively on a budget.
3. Spend Only What You Need
Employing temporary workers is a great way to cut costs and only spend what you need. Temporary workers are not permanent employees and are not required to receive the benefits that permanent employees do.
As a result of not needing to offer benefits such as health insurance and paid leave, you won’t have to spend too much money on your temp workers. With temporary workers, you can say goodbye to payroll administration, workers’ compensation, and unemployment taxes usually necessary for salary employees.
With temporary workers, you can adjust your budget and direct finances where they are more necessary.
4. No Wasted Hours
Know when to look for an hourly employee. It can be tough when you only need an employee for a few hours daily but must pay full-time to have a worker execute those responsibilities. However, this quickly racks up expenses and increases unnecessary overhead costs.
Instead of full-time wages, you can pay for only the hours you need by hiring a temporary worker to come in for those hours. This will drastically reduce business expenses and help the budget become more economical.
5. Good Trial Periods
If you hire a temporary worker for a trial period to hire them as a salary-earning employee, you can try their skills out. By doing this, you can divide their performance if they are the perfect fit for you, your business, and your work environment.
This will help you make better hiring decisions and know what to expect from the employee. If the employee performs very well, it only makes sense to hire them. However, if the employee does not perform their roles and responsibilities as well as you hoped during the trial period, you will realize they are not the best fit for your business and not hire them.
Doing this saves the stress of continuously recruiting and firing employees when they do not meet up to performance expectations. More importantly, taking your temporary employees on a “test run” can be done without commitments you can quickly get them replaced if they are not the right fit for your business.
6. Specialized Skills
When some employers hear “temp worker,” they think of an unskilled individual. However, the job market and the staffing business are filled with highly skilled individuals and professionals.
The right temporary employee will handle high-skilled projects easily and in a limited time. Just because a company does not permanently hire them does not mean they are less skilled than permanent employees.
7. Increased Productivity
Temporary employees are not less productive than salary-earning workers. The right temp worker will fulfill their duties diligently and be extremely productive when they work with you.
Cons Of Temporary Staffing
Just as there are benefits to hiring temporary workers, there are limitations that come with working with them. Some of the cons of temporary staffing include the following:
1. May Require More Training
Temporary staffing is a temporary fix in a job position. This means you may have different temporary employees in one business cycle than a permanent employee.
Although temporary workers are skilled, they usually still require training to perform their duties to the company’s standards. This means every time you hire a different temp worker, you have to train them. Over a few years, these costs can quickly make a huge dent in the company’s budget. Training your temp hires can become extremely expensive and a poor investment decision.
2. Long-Term Planning Is Difficult
Many businesses find that workers need time to settle into their position and responsibilities. This time might range from a few months of consistent work to more than a year. However, this time is also a luxury that many businesses that use temporary workers cannot afford.
With temporary workers, it isn’t easy to plan long-term. Temporary workers don’t reach the time threshold necessary to be proficient in their work, which makes long-term planning a challenge.
People are an asset in companies which is why businesses invest in their employees. Unlike permanent employees, temp hires cannot be trained to proficiency as they will leave the company when their time there is up, or the project is completed
3. Culture Fit Might Be Challenging
Another problem that comes with hiring temporary employees is they will not always be the perfect fit for your business culture. This is usually because you didn’t handle the interview process to pick who you think will be perfect for your establishment.
Because cultural fit is important in an employee’s performance, this might be a problem with collaboration at first. However, working with a good staffing agency that prioritizes your company culture might help with finding a good employee who will fit right in with the organization.
4. Less Time To Vet Employees
Temporary workers are not a permanent commitment which provides less time to vet them. Screening these candidates usually takes a shorter period which means it is easy to miss red flags that they may possess. Additionally, the short vetting time might force you to settle for someone you simply qualify as “okay” rather than looking for the perfect employee.
5. Legal Requirements
Legal requirements for hiring temporary employees are different from that for permanent workers. Hoping temp workers can be likened to hiring contractors. Depending on the industry, it comes with unique legal considerations you will need to be aware of.
Some regulations state that a temporary employee can only qualify for certain benefits after working for an extended period. One example is the retirement plan, which the employee is eligible for after working a minimum of 1,000 hours annually or nearly 20 hours per week with the same company. However, statutory employee benefits may differ from state to state, and the number of hours they work per week.
Another law by the U.S. Department of Labor (DOL) states that you can hold a temporary worker for no longer than 12 months. By law, a temporary job is a job that lasts less than 12 months. In fact, the DOL states that with the exception of one-time jobs, temporary jobs should be 9 months or less.
It is essential to note the laws of the state before hiring a temp worker. More importantly, you need to follow the rules.
6. Safety Concerns
Although a temp worker is skilled, they may not be familiar with your environment. Given that they only work for a short period, they will also not have the time to be familiar with your specific work environment. As a result, they are at more risk of an accident than workers who were trained exclusively in that environment.
7. lack of Teamwork
Without enough time to integrate into your establishment, temporary hires may find it difficult to work with team members and other employees. Regular salary-earning employees may also be wary of temporary workers whom they may consider outsiders. This might create friction in the workplace. As a result, it might be best to place temporary workers in environments that do not require an excessive amount of team work.
Is Temporary Staffing Worth It?
Since temporary staffing first became popular during and after World War II, it has been embraced by many sectors within the industry. However, many establishments are still wary about hiring temporary hires because they don’t know if it is worth it.
So, is temporary starting truly worth it?
This million-dollar question can only be answered by the establishment that wants to hire the temp worker. Know when you need a staffing agency. Weigh the pros and cons to determine if you think a temporary hire might be the best option for you and your establishment.